Is there an equivalent of a cage for Blender Internal Render?
No, there is no option to use a custom cage for baking with the Blender internal engine. The closest you can get is the &quot;distance&quot; setting, which will sort of simulate a cage.
From the Manual:

Select to Active
Enable information from other objects to be baked onto the active object.
Distance
Controls how far a point on another object can be away from the point on the active object. Only needed for Selected to Active. A typical use case is to make a detailed, high poly object, and then bake it’s normals onto an object with a low polygon count. The resulting normal map can then be applied to make the low poly object look more detailed.